Everyone who makes an investment is, in one way or another, also making a prediction. This asset will do better than that asset; this company will outperform its rivals; this segment is being undervalued. But even an educated guess on Wall Street includes a fair degree of speculation, which has Motley Fool Money host Chris Hill curious about what his colleagues view as some of the toughest areas ahead to predict.
In this segment from the Motley Fool Money podcast, he asks senior analysts Ron Gross and Jason Moser what they view as their most fundamental questions about the year ahead. For Gross, it's a matter of strategy: Will this be the year that value stocks as a class finally start outperforming growth stocks again? And in Moser's opinion, the already complicated business of streaming video is about to get even more so.
A full transcript follows the video.
This video was recorded on Jan. 4, 2019.
Chris Hill: When you think about 2019, what's your biggest question as an investor?
Ron Gross: My biggest question is, will value investing rise from the dead? As most of us are aware, growth has nicely outperformed value over the last, let's call it a decade. Not just a few months here and there, but quite a few years. FAANG stocks are perhaps the most obvious examples of growth stocks that have led the way. Obviously, we've had an extended bull market. That tends to favor growth stocks. So, my big question is, do we see a resurgence of interest in stocks that are considered value? Growth often does underperform in bear markets. If, perhaps, we are entering a bear market, are we going to see a sustained bear market, then one would expect value to come back into vogue. But, you know what? We haven't seen it anytime in recent past.
Hill: What about you, Jason?
Jason Moser: We've talked a lot about Disney and their move to over-the-top distribution. They own part of Hulu, which I think they've done a good job building out, especially with that live Hulu offering. ESPN+ seems like it's gaining some traction. And now, Disney+ is going to be their service that launches sometime in 2019. We talked before on the shows, they really need to make sure they execute there. I do think that's a compelling product. It's going to take a lot of content away from other streaming partners, namely Netflix. I find it interesting to see that the shows on Netflix that garner the most views as a percentage are all shows that are not Netflix shows. I think that's telling. Netflix is still having to put up a lot of money to get content that people want to see, and Netflix is not the one producing that content. They still, have a little ways to go in succeeding on that original content front to justify all of that money that they're spending. I think that Disney+ is going to reemphasize the competitive advantage that they have there in that intellectual property. I'm excited to see how that product arrives. I'm certain that we will at least be testing it in our house, if not becoming full-fledged subscribers, unless they really drop the ball.
Hill: Wasn't there a minor freak-out in the Netflix universe when they said they weren't going to renew the show Friends?
Gross: In my household, for sure.
Moser: That is something that they need to pay attention to. As a percentage of views, Friends is No. 2 on the list just behind The Office. When you look at that list of the shows that are garnering the most views on Netflix, it takes you back, not a lot of their original content is on that list. It just tells you they still have a little ways to go.
Chris Hill owns shares of DIS. Jason Moser owns shares of DIS. Matthew Argersinger owns shares of NFLX and DIS. Ron Gross owns shares of DIS. The Motley Fool owns shares of and recommends NFLX and DIS. The Motley Fool has a disclosure policy.